Apollo Included in BOE Stress Test Simulating 7% Rates, 35% Equity Collapse
APO•The Bank of England will include Apollo in a stress test of 46 private market firms under a scenario with 7% interest rates, a 35% UK share price collapse, a 400bp leveraged loan spread widening and AI disruptions. Apollo will submit response plans over a five-year severe global recession.
1. BOE’s System Wide Exploratory Scenario
The Bank of England has launched the System Wide Exploratory Scenario to evaluate vulnerabilities in private equity and credit markets by stress testing 46 firms, including Apollo, over a hypothetical five-year severe global recession.
2. Key Scenario Parameters
The stress test envisions 7% interest rates in year one, a 35% drop in UK share prices, a 400 basis-point increase in leveraged loan spreads, 4% GDP contraction and 7.5% unemployment in year two, followed by slow recovery.
3. Apollo’s Participation and Response
Apollo will produce detailed impact assessments and adjustment strategies for each stress scenario, then review aggregated market feedback before submitting a final risk mitigation plan in the second round.
